MARINA DEL REY, Calif., Oct. 19, 2000 (PRIMEZONE) -- In the midst of the longest economic boom in U.S. history, Americans just are not saving enough for retirement. The statistics are sobering. According to Forbes (Oct. 2, 2000), consumer spending is rising twice as fast as personal income while the monthly personal savings rate hit an all-time low of negative 0.2% in July. In addition, although the unemployment rate is at a historical low, a record number of people are going bankrupt. Since 1996, more than one million people per year have filed for personal bankruptcy, four times the number in 1979.
Partly in reaction to the dismal savings rate among Americans, this past summer, the U.S Treasury Department and the Security and Exchange Commission launched a public service campaign to encourage Americans to save more for retirement. Treasury Secretary Lawrence Summers reasoned that saving is a behavior that can be influenced, much like educating people to wear seatbelts or have annual medical exams, and must be considered as such.
With the future of Social Security a hot political issue during this election year, some are interpreting the Government campaign as a harbinger of calamitous times ahead. And with Americans now living longer, retirement savings have to spread over more years.
"But the situation doesn't have to be so dire," said Gregory G. Yost, chairman and CEO of AnnuityScout.com, an independent online marketplace for annuities recently rated as a top personal finance Web site by Online Investor Magazine (October, 2000). "The key is to save as much and as early as possible. For those getting into this game late, investments that feature tax-deferred compounding are a great way to go. Tax-deferred retirement vehicles like 401[k]s, IRAs and annuities allow their money to work harder, letting them catch up on the lost years," he added. Yost is a noted expert on tax-deferred investing and his company has been featured in such media outlets as Bloomberg's Money Wise, BusinessWeek, Dow Jones and The Wall Street Journal.
According to a Treasury Department statement (http://www.treas.gov/press/releases/clevst.doc), other initiatives began by the Government include new Internal Revenue Service rulings and clarifications that will help more Americans save for retirement through employer sponsored retirement savings plans; access to purchasing U.S. savings bonds online; creation of a partnership with non-profit, state and local governments and corporations to help push the savings initiative; and using the Web to reach the public.
"It's hard to save enough when contributions to 401[k]s and IRAs are limited. Annuities impose no limits on contribution, thus offering a chance to save larger amounts tax-deferred," Yost added. Because of the tax-deferred growth and no contribution limits, Yost noted that annuities are often the right choice for lump sum investments, such as a bonus from work or a portion of an inheritance.
About AnnuityScout.com: "Annuities Done Right"
AnnuityScout.com is an independent annuity service for both consumers and the company's business-to-business alliances. Rated by Online Investor Magazine (October 2000) as a top personal finance Web site, AnnuityScout.com is the leading online marketplace for no-load annuities. Representing more than 50 insurance companies, the comprehensive AnnuityScout "supermarket" is designed to offer products direct to those consumers who want more value from their annuities. AnnuityScout's proprietary technological platform enables the company to efficiently service the needs of its business-to-consumer clients and its business-to business alliances both on and offline. The state-of-the-art AnnuityScout call center is staffed with nationally licensed Annuity Specialists. AnnuityScout.com is a free service of Independent Advantage Financial and Insurance Services, Inc. (IAF). Founded in 1987, IAF has facilitated the purchase of more than $1 billion in annuities and high-end life insurance direct to the consumer through marketing alliances and other endorsements. AnnuityScout.com is headquartered in Marina Del Rey, California and can be reached at 1 (800) TAX-CUTS (829-2887).
Interesting Facts About the Annuities Industry
LIMRA International (an independent service that monitors the Insurance Industry) reports that overall annuity sales (combined variable and fixed annuities) grew from $98.5 billion in 1995 to (an estimated) $155 billion in 1999. This represents an average annual growth rate of 12%. Variable annuity sales have shown even greater growth. According to The VARDS Report (an independent service that monitors the variable annuity sales), the variable annuity market has grown from $51 billion in 1995 to $121 billion in 1999, a compound annual growth rate of 19%. First quarter 2000 sales for variable annuities reached $35 billion (The VARDS Report), a trend that could make 2000 a record year for variable annuity sales and could push the overall market past $200 billion.